Kuala Lumpur, 14 November 2025: The Institute for Democracy and Economic Affairs (IDEAS) today released its latest ASEAN Integration Report 2025: Challenges and Opportunities for ASEAN MSME Trade — Insights from the Food and Beverage Industry under the ASEAN Prosperity Initiative (API). Building on last year’s report that began exploring regulatory challenges for micro, small and medium enterprises (MSMEs) in ASEAN, today’s release focuses on the food and beverage (F&B) sector to provide insights of how regulatory and procedural barriers shape MSME participation in regional trade.

The F&B sector contributes significantly to ASEAN’s industrial output and employment, but only 23.1 percent of its trade remains within the region despite geographical proximity. The report finds that complex and inconsistent regulations, from nutrition labelling to halal certification and product testing, often create fragmented and overlapping requirements. These standards are essential for protecting public health and consumer safety, but their complexity and uneven implementation raise costs and slow approvals. For MSMEs operating on tight margins, these hurdles make it hard to trade across borders, leading many to focus on local markets or to trade through informal channels.

“Trade within ASEAN is still shaped more by regulatory fragmentation than harmonisation,” said Sharmila Suntherasegarun, Assistant Manager of Research at IDEAS and lead author of the report. “Food regulations are essential for consumer safety and quality, but it is the lack of consistency and coordination that holds MSMEs back. When each country applies different labelling, testing and certification rules, smaller firms face rising costs and long delays just to access neighbouring markets. Smarter, better-aligned regulations, supported by digital systems, are key to helping MSMEs trade across borders with confidence and fairness.”

Drawing on industry consultations in Malaysia and Thailand, the report highlights three priorities for action:

• Streamline nutrition labelling and strengthen region-wide guidance on food information systems. Recent ASEAN guidance is a positive step, but coherence across member states remains limited.
• Scale up digital trade facilitation and traceability by expanding digital food safety certification systems through the ASEAN Single Window and improving interoperability with global partner systems. Complement this with digital/QR e-labelling and stronger traceability features to make it easier to track products across borders, reduce duplication and curb illicit trade.
• Enhance logistics connectivity and border coordination to address gaps in cold chain capacity, shipment size requirements and de minimis thresholds, as well as unpredictable clearance procedures.

“Integration is not just about increasing trade volumes,” said Dr. Stewart Nixon, Deputy Director of Research at IDEAS. “It’s about inclusion, ensuring that smaller firms, including women-led businesses, can compete and grow within ASEAN’s evolving economy. As global trade faces heightened uncertainty from shifting supply chains and rising compliance costs, ASEAN must prioritise clearer rules, smoother implementation and stronger digital connectivity. These steps will make trade more predictable, fair and accessible.”

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For enquiries, please contact:
Ryan Panicker
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T: 03 – 2070 8881/8882 | E: ryannesh@ideas.org.my